In two potentially landmark decisions, the Supreme Court of the State of Washington decided last month that defendants cannot be held liable for failing to warn of the hazards of another manufacturer's product that is applied to or incorporated into the defendants' products. These rulings should be welcome news to any company that manufactured, sold, or distributed a product that was used in conjunction with a potentially hazardous material. While both cases decided by the court involved asbestos exposure, the same theory of liability could be asserted in association with lead paint, benzene, or even flammable or explosive materials.
By rejecting the advocated expansion of the "Duty to Warn" theory of recovery, the court hampered the plaintiffs' bar's continuing effort to identify and target new theories and sources of recovery. Nevertheless, the plaintiffs' bar is likely to continue to pursue this theory of recovery in other jurisdictions, especially in light of the strongly worded dissents authored in the Washington cases. Accordingly, any company whose products were, or could have been, used along with a hazardous material may face claims in the future for failing to warn about injuries that the plaintiffs will assert were or should have been foreseeable. Legal departments, therefore, should familiarize themselves with this novel argument for the expansion of tort law. You should also be prepared, in the event that your company is targeted in the future, to both defend such claims and seek insurance coverage for your defense costs and any resulting liability.
The two cases decided by the Supreme Court, Simonetta v. Viad Corp. and Braaten v. Saberhagen Holdings , were both brought by plaintiffs diagnosed with asbestos-related malignancies who were allegedly exposed to asbestos while performing work for the U.S. Navy.1In Simonetta , the plaintiff's duties included maintenance of an evaporator used to desalinate seawater. Although the evaporator contained no asbestos when manufactured, it was later insulated with asbestos-containing products manufactured by a third party after being installed by the Navy. Mr. Simonetta, who was diagnosed with asbestos-related lung cancer, claimed he inhaled asbestos while performing routine maintenance on the evaporator, approximately every three to six months, during which asbestos insulation had to be removed and replaced.
In Braaten , the deceased plaintiff had been diagnosed with mesothelioma, a type of cancer usually associated with exposure to asbestos. Mr. Braaten had been exposed to respirable asbestos during his work as a pipefitter performing regular maintenance on equipment aboard U.S. Navy ships. The defendants were valve and pump manufacturers that had supplied the U.S. Navy. Similar to the defendants in Simonetta , the Braaten defendants' products were insulated with asbestos-containing products by the Navy after installation. The evidence presented at trial was that Mr. Braaten routinely removed and replaced this asbestos-containing insulation in order to perform necessary maintenance, which also included replacing the valves' and pumps' asbestos-containing gaskets.
In both Simonetta and Braaten , the plaintiffs alleged that the manufacturer defendants were liable under both common law negligence and strict liability for failing to warn about the dangers associated with exposure to asbestos. The plaintiffs alleged that this failure by the defendants rendered their evaporators, valves, and pumps unreasonably hazardous, even though those products did not contain asbestos at the time they were manufactured, distributed, and sold. The trial courts in both cases rejected the plaintiffs' theories of recovery and granted the defendants' motions for summary judgment. The appellate courts, however, reversed the finding that the plaintiffs had established that the defendants "knew or reasonably should have known" that their products would be insulated with asbestos-containing material, that such insulation was necessary for the products to operate as intended, and that such insulation would need to be removed and replaced in performing routine maintenance, thereby exposing individuals to hazardous asbestos. Based on those conclusions, the appellate courts determined that the defendants could be potentially liable to the plaintiffs because asbestos exposure was inherent in the intended and proper use of their products.
The Supreme Court's Majority Decision
The Supreme Court of the State of Washington expressed a more skeptical view of the plaintiffs' legal theories. The majority, finding that no Washington precedent supported the plaintiffs, articulated a blanket rule that a duty to warn under common law negligence "is limited to those in the chain of distribution of the hazardous product." Because the defendants did not manufacture, sell, or supply the hazardous asbestos insulation, the defendants could not be found liable for breaching a duty to warn.
The court also concluded that the defendants were not strictly liable for producing a dangerous product because only a product's manufacturer, seller, or marketer is in the position of knowing its dangerous aspects and therefore able "to translate that knowledge into a cost of production against which liability insurance can be obtained." To hold a defendant strictly liable for another party's product would be manifestly unfair.
Therefore, by defining the potentially hazardous product as the asbestos-containing insulation and not the evaporators, valves, and pumps manufactured by the defendants, the court removed the defendants from the "chain of distribution" and eliminated their possible liability to the plaintiffs based on a "duty to warn" theory of recovery.
The Dissenting Justices' Opinion
Three of the court's nine justices, however, dissented and wrote a strongly worded opinion in support of the appellate courts' decision that manufacturers could be obligated to warn of dangers inherent in the use of their products even if such dangers arise from the product of a third party.
The dissenting justices fundamentally disagreed with the majority's analysis. Rather than focus on whether the defendants were in the asbestos-containing insulation's "chain of distribution," the dissenting justices focused on whether the defendants' evaporators, valves, and pumps could "actually be used" without exposing individuals to potential harm. Finding that "exposure to aspirable asbestos was integral to the ability to use" the defendants' products, the dissenting justices determined that the defendants' products were potentially dangerous and a common law negligence duty to warn should exist.
The dissenting justices also criticized the majority's strict liability analysis by finding that strict liability "does not allow for the artificial segregation of the [defendants' products] from the asbestos insulation that [the plaintiffs] necessarily encountered in order to use the product." The dissenting justices instead asked whether "exposure to aspirable asbestos during required maintenance . . . is a risk inherent in the use of the product." After answering this question in the affirmative, the dissenting justices concluded that the defendants manufactured hazardous products and could be strictly liable for failing to warn about those hazards.
What Can Be Expected In The Future?
Many companies and industries will benefit from the Washington Supreme Court's resolution of the Simonetta and Braaten cases. By reinstating the trial court's summary judgment rulings, those decisions prevent a new expansion of tort law in the state of Washington. However, while the Simonetta and Braaten decisions are certainly welcome news, one certainty in tort litigation, especially asbestos cases, remains: The plaintiffs' bar will remain creative and dogged in its pursuit of new targets. Therefore, the plaintiffs' novel "Duty to Warn" theory of recovery is likely to be asserted in other jurisdictions in connection with additional products and alleged injuries.
As a preliminary matter, given the strong dissenting opinions, Simonetta and Braaten may not be the unqualified victories that the cases' ultimate resolutions suggest. The dissenting opinions' articulate analyses will no doubt embolden plaintiffs' attorneys in other jurisdictions. If this proves correct, companies and industries whose products are used in conjunction with or incorporated into an injurious product may find themselves the targets of the plaintiffs' bar. As an example, any company whose products could have been painted with lead paint after being sold, including such disparate sectors of the economy as industrial machinery, residential building materials, and children's toys, could face claims that it breached a duty to warn about the potential hazardous effects of lead exposure.
While lead paint and asbestos are rarely used today, other allegedly hazardous substances remain in common use, such as benzene and MTBE, and could result in a failure to warn lawsuit against your company. Additionally, as the medical and environmental sciences continue to progress, it is likely that new mass torts will arise in the future. Pursuant to the expanded "Duty to Warn" theory of recovery, your company could be required to actively monitor such advances, determine if your company's products are being used in conjunction with the new hazard, and then create a system for warning end users about any potentially dangerous results. A failure to take such steps could result in a claim for breaching the duty to warn of a known or foreseeable risk.
Recommended Protective Steps
In the face of this potential threat, companies who know that their products were used along with asbestos, lead paint, or another known hazard should begin to prepare now before confronted with the first of what could quickly become a multitude of potential claims. To prepare, companies should invest time in formulating a coherent and integrated response. Such response will need to include potential defense strategies, self-discovery regarding corporate history, sales records, and product usage, and the investigation and organization of risk management records and insurance policies. By preparing at the outset, companies that anticipate being targets of "Duty to Warn" lawsuits can make themselves an unattractive target for the plaintiffs' bar as well as secure potentially available insurance to pay for what could be very significant defense costs.
In addition, all companies should remain on top of developments in mass tort litigation. A prominent, contemporary example is the burgeoning litigation asserted against particular industries, including automobile manufacturers, energy companies, and chemical companies, for contributing to the public nuisance of global warming. As this area of the law develops, your company should consider whether its products are even tangentially associated with the creation of greenhouse gases and whether prophylactic steps are necessary to protect your company from either direct or "Duty to Warn" liability.
Finally, companies can protect themselves by discouraging the mass tort plaintiffs' bar from filing additional cases. While the Simonetta and Braaten cases ultimately resulted in no liability for the defendant companies, those cases still required their defendants to incur extensive defense costs. In addition to taking the preparatory steps described above, companies should highlight both in litigation and in other public forums the potentially limitless reach of novel arguments like the "Duty to Warn" theory of recovery. In doing so, companies can simultaneously defend themselves and deter the filing of future lawsuits based on such novel legal arguments.
1Simonetta v. Viad Corp., 197 P.3d 127 (Wash. 2008); Braaten v. Saberhagen Holdings , -- P.3d --, 2008 WL 5175083 (Wash. Dec. 11, 2008).
John E. Heintz is the Chair of Kelley Drye's insurance recovery and Washington, DC litigation practice groups. Justin F. Lavella is an Associate of these same practice groups at Kelley Drye &Warren LLP.. Mr. Heintz may be reached at (202) 342-8412 and Mr. Lavella may be reached at (202) 342-8446.